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Legislation Related to Foreign Investments in Dubai

Updated on Tuesday 19th April 2016

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The 2014 Global Investment Report issued by the United Nations Conference on Trade and Development (UNCTAD) presents the United Arab Emirates as the second largest recipient of foreign direct investments (FDI) in West Asia. The Emirates attract over 10 billion USD in FDI annually. Even if the country has not implemented a legislation targeting foreign investments, each Emirate has its own regulations with respect to the rights and investment opportunities for international players. Dubai’s strongest points in attracting FDI are the hydrocarbons, water and electricity industries followed by the ongoing development of the tourism, financial and services sectors.

 

Why does Dubai attract foreign direct investment?

Even if no laws on FDI have been implemented, The Dubai Government compensates by granting foreign investors other benefits. Among these are:

  • -          no corporate taxes for most types of companies,
  • -          no direct income taxes,
  • -          no limitations on the repatriation of profits.

The Company Law does not allow for full foreign ownership of companies within Dubai, but the Emirate’s free zones do allow the establishment of companies 100% owned by international enterprisers. Also, to compensate for the lack of a legislation on foreign investments, Dubai has signed several international agreements among which:

  • -          bilateral and multilateral international treaties,
  • -          double tax treaties,
  • -          international cooperation agreements.

For a complete list of all UAE’s international agreements, please contact our Dubai agents.

New Company Act in Dubai

In the summer of 2015, the UAE has enabled the new Commercial Law which is more permissive with foreign investors. One of the new regulations abolishes the number of shareholders and directors in limited liability companies which is one of overseas entrepreneurs’ favorite type of business structures. Also, in the years to come, the Government plans to allow full foreign ownership of companies within the Emirates. The new Commercial Code also provides for new conditions for the establishments of holding companies.

The video below presents the main laws encouraging foreign investments in Dubai:

 

Our company registration agents in Dubai can provide you with details about the provisions of the new Company Law. You can also request our services if you want to open a company in Dubai.

 

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